Petrobras begins pumping natural gas from first pre-salt field of Santos Basin

The Lula-Mexilhao pipeline links to a terminal on the coast of Sao Paulo

Brazil's energy giant Petrobras began pumping natural gas from the offshore Santos Basin on the new 216-kilometer Lula-Mexilhao pipeline Friday, the company said Monday in a statement.

The pipeline will gradually build up to 10 million cubic meters a day of natural gas. The gas will be sold in Brazil through a terminal on the coast of Sao Paulo state and an inland pipeline leading to the interior of Sao Paulo, Brazil's most populous state.

The Santos Basin gas comes from a deep offshore region known as the pre-salt area, rich in both crude oil and natural gas.

The pipeline startup, in turn, will allow Petrobras to boost production at the offshore Lula field, the first oil field from the Santos Basin of pre-salt oil discoveries.

Production at Lula has been capped by limits on the amount of natural gas that can be flared, or burned off. Lula is currently producing about 30,000 barrels of oil a day as part of a pilot production project